New Study Builds Case for Pay-As-You-Drive Auto Insurance

The more you drive, says a new study, the more you are at risk of getting in an accident. So if how much one pays for car insurance was linked to mileage, there would be a significant reduction in driving - and fender benders.

1 minute read

December 10, 2010, 11:00 AM PST

By Todd Litman


The study was funded by the Conservation Law Foundation. From the introduction to the study, which was based in Massachusetts:

"The Conservation Law Foundation (CLF) and the Environmental Insurance Agency commissioned a study

to assess the risk‐mileage relationship using actual insurance claims information in Massachusetts. This

study ("Ferreira and Minikel 2010") offers the largest disaggregated analysis to date of the risk‐mileage

relationship and the actuarial basis for PAYD. The work analyzes data on $502 million worth of claims on

almost 3 million cars driven an aggregate of 34 billion miles. The study confirms the statistical

soundness of pay‐as‐you‐drive auto insurance pricing and indicates that the PAYD approach would result

in significant reductions in miles driven, green house gas emissions, and auto accident losses without

adverse equity impacts to drivers."

One interesting part of their proposal in regards to planners is the suggestion to charge suburban and rural car owners less per mile than urban car owners.

The full study can be downloaded directly here.

Thanks to Todd Litman

Friday, December 10, 2010 in Pay-As-You-Drive Auto Insurance In Massachusetts: A Risk Assessment And Report On Consumer

portrait of professional woman

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching. Mary G., Urban Planner

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching.

Mary G., Urban Planner

Cover CM Credits, Earn Certificates, Push Your Career Forward

Aerial view of town of Wailuku in Maui, Hawaii with mountains in background against cloudy sunset sky.

Maui's Vacation Rental Debate Turns Ugly

Verbal attacks, misinformation campaigns and fistfights plague a high-stakes debate to convert thousands of vacation rentals into long-term housing.

July 1, 2025 - Honolulu Civil Beat

Logo for Planetizen Federal Action Tracker with black and white image of U.S. Capitol with water ripple overlay.

Planetizen Federal Action Tracker

A weekly monitor of how Trump’s orders and actions are impacting planners and planning in America.

July 2, 2025 - Diana Ionescu

Map of Haussmann's redesign of Paris in the 1850s through 1870s under Napoleon III.

In Urban Planning, AI Prompting Could be the New Design Thinking

Creativity has long been key to great urban design. What if we see AI as our new creative partner?

June 30, 2025 - Tom Sanchez

Street with parking protected bike lane and parked cars in downtown Portland, Oregon.

Portland Raises Parking Fees to Pay for Street Maintenance

The city is struggling to bridge a massive budget gap at the Bureau of Transportation, which largely depleted its reserves during the Civd-19 pandemic.

July 8 - Willamette Week

Aerial view of Spokane, Washington with river in foreground.

Spokane Mayor Introduces Housing Reforms Package

Mayor Lisa Brown’s proposals include deferring or waiving some development fees to encourage more affordable housing development.

July 8 - The Spokesman-Review

Close-up on black and white "Bike Lane Ends" sign with bike logo.

Houston Mayor Kills Another Bike Lane

The mayor rejected a proposed bike lane in the Montrose district in keeping with his pledge to maintain car lanes.

July 8 - Houston Public Media

Urban Design for Planners 1: Software Tools

This six-course series explores essential urban design concepts using open source software and equips planners with the tools they need to participate fully in the urban design process.

Planning for Universal Design

Learn the tools for implementing Universal Design in planning regulations.

Associate/Senior Planner

Gallatin County Department of Planning & Community Development

Senior Planner

Heyer Gruel & Associates PA